Back to homepage...

Chapter 11

New Social and New Political Unionism:
Labour, Industry, and the State in India and Pakistan

Christopher Candland

Globalization has expanded transnational consumption networks and made labour processes increasingly informal, transforming the very nature of work. Globally, formal employment is shrinking. The urban informal sector grew twice as fast as the organized sector in the 1980s. In South Asia, which contains nearly 20% of the world labour force, more than 90% is in the informal sector. Large employers and even public sector enterprises, many having banned recruitment for regular employment decades ago, employ casual and contract workers (Cf. Chowdhury 1996). The rediscovery of the informal sector and the renewed management emphasis on keeping labour informal, on contract, on an independent, free-lance, or house-hold basis, or in an otherwise unregulated and unprotected condition, challenges the ability of trade unions to organize and to represent labour. Organized labour finds itself in the midst of a historic economic challenge. Not only does it suffer from the general crisis of legitimacy in the conventional organizations and associations of modern political life. It has also been shaken from its foundations in an increasingly informal economy.

The relatively small portion of the labour force in developing countries that is organized has been repeatedly characterized as economically elitist, politically conservative, aristocratic and unrepresentative. The view that organized labour is a privileged sector runs from accomplished Marxists (Lenin 1975) to modern labour and contemporary social theorists (Arrighi and Saul 1968, Omvedt 1993). Indian trade unionists acknowledge having once ignored the vast informal sector. As All India Trade Union Congress President E. Balanandan puts it, the informal sector was viewed as residing "on the fringes of its parent, the robust organised sector." Comrade Balanandan reflects common sentiments among South Asian trade union leaders: The informal sector, based on "low working capital, cheap labour and scuttling of all labour laws... now threaten[s] the very existence... of the organized sector." Trade unions "must work more systematically to organise the workers in the unorganised sector and bring them into the common struggle, which will give a new turn to the trade union movement in the country" (Balanandan 1995).

This essay covers diverse terrain to gain a wider perspective on the economic transformations facing trade unions in South Asia and the organizational and strategic transformations they have effected. We look specifically at India and Pakistan, the countries of the region with the largest economies and largest labour forces. Focusing on two specific issues — trade union relationships with political parties and workers' representation in trade unions — two distinct historical trajectories emerge. An impressive labour movement based on political unionism developed in India. An assertive but repressed workers' movement took shape in Pakistan. The chief theoretical contribution formed in this comparative historical analysis is that social movements and institutions, regardless of their near complete neglect by conventional political economy studies, are key forces in economic reform.

The next section assesses the ability of each labour movement to resist the current neo-liberal economic reforms. We trace the nature of trade union power to the structure of labour institutions fashioned by past political regimes. Finally, we examine trade union responses to structural economic changes and new economic policies. We draw from a debate within the Indian trade union movement concerning the limitations of political unionism and new union strategies. We note the apparent limitations of political unionism and suggest that a new unionism, with wider networks among other social organizations and deeper roots in community, will also include a new political dimension.

Indian and Pakistani Trade Union Development

The newly independent states of India and Pakistan inherited identical colonial labour legislation, but the working classes and their organizations were afforded markedly different roles. The Indian National Congress, which dominated the independence movement and parliaments in independent India, maintained a strong concern for labour from at least 1920 with the founding of the All India Trade Union Congress (AITUC). The All India Muslim League, the party that successfully petitioned for the creation of Pakistan, had no such concern for labour and did not develop relations with organized labour in its campaign for Pakistan. 

India and Pakistan exhibit the stark contrasts in regime type and in development ideology that is rarely seen between neighboring countries, excepting those created by partition. Pakistan, claiming to be the national right of South Asian Muslims gave way to decades of military rule soon after its creation in 1947. India maintained a competitive electoral democracy which predates Independence. Similarly, India and Pakistan adopted markedly different development strategies. Indian planners were inspired by Fabian socialism and Soviet industrial achievements and followed an import substitution strategy for economic development that was politically buttressed by socialist rhetoric. Pakistani planners, in contrast, had no firm ideological moorings and were persuaded by American advisors in the 1950s to adopt a more export-oriented development strategy and an economic doctrine of "functional inequality." Economic development was to be fueled by the concentration of private capital.

The impact of their divergent economic ideologies is particularly evident in the field of state-labour relations. Both countries inherited identical regimes of labour legislation. A few pieces of colonial labour legislation, provided the basic structure of the Indian and Pakistani labour regimes for twenty years after independence. These are the Trade Union Act, 1926, the Industrial Employment (Standing Orders) Act, 1946 and the Industrial Disputes Act, 1947. The Industrial Disputes Act, 1947, for example, establishes permanent administrative machinery for the settlement of labour disputes, laying down deadlines for specific stages of consultation and arbitration, requires employers to recognize and to negotiate with trade unions, prohibits strikes and lock-outs during pending conciliation, and provides that industrial disputes in public services be settled by compulsory arbitration.

But military governments in Pakistan rewrote the colonial era labour legislation and restructured the labour institutions. The Yahya Khan government ensured that the trade union movement would be weak, factory-based, and politically fragmented. The state promoted trade union multiplicity and restricted the trade unions' national political participation. 

None of Pakistan's political parties have evidenced interest in incorporating labour. India's elected governments encouraged the development of politically powerful trade unions which could serve as electoral vehicles for the major political parties. The participation of industrial labour in the independence struggle secured an institutional role for organized labour in Indian politics. A brief review of Indian and Pakistani labour history bears this out (Cf. Candland 1995)

As a response to the creation of the International Labour Organisation in 1919, the All India Trade Union Congress (AITUC) was founded in 1920. Leaders of the Indian National Congress and other nationalist parties played an important role in the development of AITUC. Jawaharlal Nehru, India's first and longest standing Prime Minister, served as AITUC President, as did nationalist leaders of a variety of political persuasions. The Indian National Congress, which dominated the independence movement, and the Communist Party of India maintained a strong concern for labour. Mohandas Gandhi's strategy of moral resistance to colonial rule, leading to the formation of the Ahmedabad Textile Labour Association in 1920, gave ideological impetus to a tradition of trade unionism that eschewed class struggle and confrontation. Just prior to independence in 1947, the Congress created its own party-based trade union organization. After independence other political parties, as they gained national standing, sponsored their own trade union wings. When parties split, as did the Communist Party of India in 1964, new trade union organizations were established, as was the Centre for Indian Trade Unions (CITU) in 1970. One of the newer centers, the Bharatiya Mazdoor Sangh (BMS), tied to the Hindu nationalist Bharatiya Janata Party (BJP) and the Rashtriya Swayamsevak Sangh (RSS), may be the fastest growing trade union center in India. 

Each major political party maintains a trade union wing, or in Indian parlance, a "centre." Between some trade union centers and political parties — particularly on the left, where the organization of working classes is an integral component of the party's program — there is a regular exchange of officials. The current Indian Home Minister Inderjit Gupta, for example, rose from General Secretary of the Communist Party of India's All India Trade Union Congress to become the General Secretary of the Communist Party of India. Even officials of the centrist Indian National Trade Union Congress occupy seats in Parliament and in state legislative assemblies. All trade unions claim to be autonomous from their party affiliates yet some support party candidates and use trade union channels for electoral advancement. The weekly newspaper of INTUC, for example, the Indian Worker, prints election material proclaiming that only the Congress can protect the working class. The trade union centers serve as vehicles for successful organizers to become political leaders (Cf. Chandra Das 1990 on Orissa) Fifty-two parliamentary seats, nearly ten percent of the Lok Sabha, the lower house of the Indian Parliament, were once considered to be labour constituencies, where political parties vie for candidates among trade union leaders (Mathur 1991). One such trade unionist, V. V. Giri, rose to become Minister of Labour and then President of India.

Presently, there are ten major trade union centers in India, each affiliated in some manner to a political party. 

As labour occupied no significant part of the imagination of the All India Muslim League, Pakistan's post-independence economic development strategy gave virtually no attention to labour, except as an industrial input to be drawn from rural areas at subsistence wages. Labour was to assume the role specified by Sir Arthur Lewis in his neoclassical model of economic growth. The Essential Services Maintenance Act, 1952 is representative of Pakistani labour law. The law prohibits unions and makes absence from or stoppage of work an imprisonable offense in any industry or service designated by the government at any time as "essential to the life of the community" (GoP 1952). It applies today to employees in the banking and finance, broadcasting, post, and telecommunication services, and in the railways and defense industries, a violation of ILO Conventions 89 and 96 repeatedly cited by the ILO.

Repressed and politically disincorporated, the Pakistani trade union movement has nevertheless been influential as a social movement at key phases in Pakistan's political development. In March 1969, popular unrest, in which students, new professional classes, and factory workers played the dominant role, brought an end to General Ayub Khan's decade of martial rule and brought elections for a new Constitutional assembly (Cf. Ahmed 1974). In response to the political challenge of organized labour, the interim military government, having entrusted itself with the supervision of elections, quickly devised a new labour policy to depoliticize labour. The policy, promulgated as the Industrial Relations Ordinance of 1969 (IRO), was designed by Deputy Martial Law Administrator Noor Khan. The IRO gave industrial workers the fundamental rights for which they had agitated: the right to form trade unions, the right to collective bargaining, and the right to strike. At the same time, the Ordinance effectively prohibited industry-wide or nation-wide unions. The Ordinance required that 75% of the members of any trade union declare the same employer. But as large nation-wide enterprises, such as the railways and post, are deemed by the government as essential industries and services, unions may not form in such enterprises. The IRO instituted enterprise unionism in Pakistan.

Noor Khan's inspiration was his experience in Pakistan International Airlines (PIA), the very successful, military owned and operated national airline. (N. Khan 1995) When he assumed control of PIA in 1959, standard procedure was to imprison workers who attempted to form unions. Noor Khan decided that PIA would run better if these workers were released from jail, brought back to PIA, and permitted to form a union, provided that their union could be insulated from lawyers, social activists, politicians, and professional trade unionists, so called "outsiders." Workers were required to represent themselves. The IRO extended the PIA politically insulated enterprise union model to the entire country through a Collective Bargaining Agent (CBA) system. Federations of unions were permitted, but the selection of trade union leaders and the conduct of collective bargaining was restricted to the factory-level. The CBA system requires that trade unions win a secret ballot election in order to obtain the exclusive right to negotiate with management and to take industrial action.

Serial data on trade union and trade union membership growth in India and Pakistan suggest that the Industrial Relations Ordinance 1969 did have a powerful influence on the structure of trade unionism in Pakistan. As a result of Air Marshal Noor Khan's 1969 labour policy, the number of trade unions almost doubled within a year (Figure 1). As trade union membership grew steadily, the rapid multiplication of trade unions led to a rapid decline in membership density. The Industrial Relations Ordinance 1969, was amended by Prime Minister Zulfikar Ali Bhutto in 1976 with the intention of stopping further multiplication of trade unions. Like the IRO, the effects of the 1976 amendment is reflected in membership statistics. Moreover, statistics on industrial disputes (Figure 2) suggest that the fragmentation of organized labour in Pakistan effected by the CBA system helped to quell labour militancy.

In India, neither the number of unions nor membership density underwent dramatic change in the late 1960s or early 1970s (Figure 3). In India, we do not find a dramatic decline in industrial disputes in the early 1970s (Figure 4), although Indian trade unionists report that trade unions began to suffer a gradual decline in their collective bargaining power in the mid-1970s. Rather, we see a steady rise in the number of workdays lost and number of workers involved in industrial disputes until the early 1980s. This decline in industrial disputes in the early 1980s reflects the success of managerial production and employment strategies, the point of departure for the next section. 

Industrial Restructuring and Trade Union Response

Both India and Pakistan are undergoing International Monetary Fund structural adjustment. One of the essential conditionalities of IMF structural adjustment in both countries is public sector privatization. Political conflicts over privatization often reveal patterns of influence between agencies of the state and social institutions. Like Peter Gourevitch's "hard times," privatization in India and Pakistan "expose(s) strengths and weaknesses to scrutiny, allowing observers to see relationships which are often blurred" (1986: 9). Here we briefly examine the experiences with privatization in India and Pakistan to better illustrate the relationship between labour and the state in India and Pakistan.

The Government of India announced in June 1991 that unprofitable public sector enterprises would within three years no longer be able to rely on government subsidies to make up losses. Unprofitable enterprises were to be privatized. More than five years later, the central government has not completed the privatization of any of its 248 enterprises. The government has sold shares in public sector units, but most of these shares have gone to government financial institutions, effectively transferring public debt from public sector industry to public sector financial institutions. Only 31 public sector enterprises have been subject to any disinvestment, and these only at an average of 8% of equity.

In Pakistan, privatization has been anything but cautious. Rather than gradually disinvesting shares, the Pakistan government arranged for the wholesale liquidation of the public sector. As soon as Nawaz Sharif became Prime Minister in October 1990, he announced that his government would move rapidly to privatize the public sector and to deregulate private industry. Sharif declared that Pakistan's privatization program would be a model for the entire Muslim world and would rival anything that Margaret Thatcher could achieve (Economic Review 1992). Sharif's Disinvestment and Deregulation Committee, now the Privatisation Commission, recommended that the government altogether "retire from the production of industrial goods" (World Bank 1993: 49) and approved nearly all central government enterprises for privatization. These included all manufacturing enterprises, all the nationalized banks, and such public sector giants as the Pakistan Telecommunications Corporation. In the five years since the Privatization Commission was established, much of the Pakistani public sector has been sold to private investors.

Unions in both countries have organized national and local strikes, public demonstrations, court challenges, and various local agitations. Neither movement has been weak on the streets. But in India, protests have lead to reversals of government privatization decisions and to a series of tripartite negotiations to manage industrial restructuring by sector. Tripartite negotiations were begun in December 1991 under the auspices of the Prime Minister's office (Cf. ILO 1992, Mathur 1992). In Pakistan, these protests — sometimes quite militant and prolonged — have led to plant level union-government agreements on industrial restructuring. The Government of Pakistan has privatized dozens of public sector enterprises, from tractor factories to large commercial banks.

Pakistan's enterprise based trade unions negotiated an agreement with the government that smoothed the way for privatization. Pakistani trade unionists in 115 public sector units scheduled for privatization formed the All Pakistan State Enterprises Workers' Action Committee (APSEWAC) in 1990. APSEWAC was able to negotiate an agreement with the federal government that gives workers of privatizing enterprises the options of retaining their jobs for at least one year after privatization, retiring with a pension amounting to four months' salary for every year worked, or purchasing the enterprise using retirement funds and bank loans (APSEWAC 1990). Workers' representatives formulated business plans for units in the manufacture of cement, chemicals, and transport equipment (Yaqoob 1992). Presently, nine of the sixty three industrial and financial concerns that have been privatized are now owned and, in some cases, managed by employee groups (A. R. Khan 1995). When the privatization of Pakistan's entire power sector was threatened by the refusal of 800 workers to allow foreign investors to inspect the Kot Addu power plant, the government's agreement to use the APSEWAC agreement as a base for negotiations with the workers resolved the seven month stand-off (Ahmed 1995).

The Government of India, on the other hand, has not been able to privatize a single central public sector unit. The government's failure to privatize the Indian Iron and Steel Company clearly demonstrates the strength of political unionism labour in India. As the Steel Authority of India Ltd. (SAIL), under the financial constraints of a tighter government budget, was unable finance the modernization of IISCO, the government, in a cabinet meeting in November 1993, decided that IISCO should be privatized. The Communist Party of India-Marxist (CPM) government of West Bengal, where IISCO is located, supported the move. The government invited bids and accepted that of an Indian industrialist.

The 30,000 workers at the Burnpur-based unit strenuously objected to the privatization plan. INTUC, the CPM's chief rival in West Bengal, together with other centers, organized a "lightning strike to oppose the decision" (The Statesman 1993) The unions managed not only to stage a strike throughout the entire public steel sector but also to gain the support of officers associations. A Parliamentary committee, convened to review the privatization decision, recommended that the decision be withdrawn and that SAIL be given the necessary budgetary support to finance IISCO's modernization. The government, despite the Congress Party's majority in the chamber, withdrew from the Lok Sabha the bill which would have effected the privatization of IISCO. The reversal of the government's decision to privatize the giant public sector enterprise demonstrates the ability of politically affiliated unions, when they are united across party lines and when they form strategic alliances with opposition political parties, to oppose government privatization efforts.

Labour opposition in India has not been restricted to the traditional mechanisms of strike actions and negotiations. Labour agitations have also employed some unusual and ingenious strategies. The Bombay workers of Hindustan Lever, an Indian subsidiary of the giant Anglo-Dutch multinational Unilever, locked out of their factory, produced their own washing detergent powder under the brand name Lock-Out. Selling 110 tons of the powder won the union considerable public attention. Continuing the innovative strategy, the Hindustan Lever Employees' Union runs parallel annual general shareholders' meetings so as to inform investors of various management and financial irregularities (Setalvad 1992: 99-100). In August 1992, cotton textile mill workers from central Bombay marched through the streets in underpants and undershirts denouncing India's independence and commitment to eradicate poverty as a sham (Bakshi 1992).

The Indian trade union centers have also been able to obstruct reform of labour legislation envisioned in the IMF structural adjustment program. One of the most contentious issues in India's labour reform process is the fate of the Industrial Disputes Act, 1947 (IDA). Section 25 of the IDA, originally an ordinance under Mrs. Gandhi's emergency government in 1976, requires government permission before large scale lay-offs. International financial institutions and foreign aid agencies have applied intense pressure on the central government for an amendment of the IDA so that employers may terminate employees at their discretion. The adoption of this so-called "exit policy" has been effectively opposed by the trade union centers. 

Although the ability of trade union centers to block a major component of the reform program is an important measure of Indian trade union power, some trade unionists privately admit that opposition to the exit policy may have been unwise. Employers have been able to dispense with excess labour through lock-outs, voluntary retirement schemes, sub-contracting, and other means (Shrouti 1994). The absence of a legal mechanism for the closure of industry has prevented workers from receiving compensation or retraining. Indian trade unions have been able to halt privatization in the public sector and to obstruct labour law reform, but face an altogether different challenge in the increasing informalization of employment and deregulation of the labour market.

Despite the obvious advantages of political unionism in obstructing economic policies, conventional trade unionism has been roundly criticized for representing chiefly formal sector workers, being largely concerned with wage gains, and seeking to have influence only through political parties. Perry Anderson (1967) outlined the major limitations of trade unionism, tracing these to the nature of labour's relationship to capital. The contention that political unionism fails to adequately respond to the deep changes that have been occurring in modern economies, societies, and cultures is now commonplace even among trade union centers.

Ironically, the principal source of the political strength of the Indian trade union movement — its relationship to the major political parties — is also its principal source of shopfloor weakness. The close ties between Indian trade union centers and the major political parties have made the unions dependent upon political party priorities and rivalries. Scholarship on trade unions in India has argued that the Indian unions are politically weaker than their European counterparts because there are too many of them. Lloyd Rudolph and Susanne Hoeber Rudolph refer to this as "involuted pluralism" (1987: 259-289), adapting Clifford Geertz's concept of "agricultural involution" (1963) to emphasize that excessive multiplicity has weakened the trade union movement. Indian trade union multiplicity certainly complicates labour-management negotiations and can often be exploited by management. But the weakness of Indian trade unions is a consequence of trade union dependency upon political parties, of which multiplicity is only a symptom. In Pakistan too more than a dozen unions might be active in a single enterprise. However, Pakistan's collective bargaining agent (CBA) system requires management to negotiate with only one, thus regulating shopfloor political rivalry.

While the Indian trade union centers have been powerful in obstructing official national-level privatization, they are socially weak. Privately, trade union officials admit that union membership rates have dropped. Publicly, social activists and representatives of non-governmental organizations complain that trade union officials are uncooperative and bureaucratic. This is a reflection of the cost of labour's incorporation by political parties.

One of the strongest indications of the frustration with political unionism was the Bombay textile strike, the world's largest industrial action, as measured either by the number of workers involved or by the number of workdays lost. One of the chief demands of the striking workers was the derecognition of the INTUC affiliated Rashtriya Mill Mazdoor Sangh (National Mill Workers' Union). Under the corporatist Bombay Industrial Relations Act (BIR) of 1946, a single trade union is recognized for the cotton, woolen, and silk textile industries. Since 1946, the Congress-affiliated Rashtriya Mill Mazdoor Sangh (RMMS) has been the sole recognized union for 60 mills in Bombay and Gujarat (Naik 1992). Textile workers regard the RMMS as an instrument of management not as a union that represents textile workers (Cf. van Wersch 1992). Workers were so determined to strike against the RMMS that they enlisted the independent Dr. Datta Samant to lead to the strike (Samant 1993). Samant was uncompromising, as were the millowners. As a result, at least 100,000 workers lost their jobs (Bakshi 1992) and the strike has yet to be called off. Most of the textile workers moved to poorly paid and unregulated informal work in powerloom sheds. The struggle for independent unionism in the Bombay textile industry suggests that the power of political unionism may be purchased at a rather high price.

Political unionism is increasingly viewed by labour organizers, even within the Indian trade union centers, as a hindrance to their social relevance. In West Bengal, the Communist Party of India-Marxist (CPI-M) government has privatized industry and retrenched labour and the otherwise firebrand Centre for Indian Trade Unions (CITU) has largely conceded (Nagarik Manch 1991). Even trade union officials in the political unions acknowledge that Indian trade unionism is hobbled by a dependent relationship to political parties. One senior INTUC official suggests that the best thing that the Indian trade union centers could do for the Indian labour movement would be to disband (Mazumdar 1991).

The costs of incorporation may also be gauged by the importance which Indian trade union centers assign to workers' management schemes as mechanism for preserving employment in an era of industrial restructuring. The lack of serious consideration and little more than rhetorical support given to workers' management schemes in India is an indication that the incorporation of the Indian trade unions has come at a cost. Indian trade union centers are not supportive of workers management schemes, although workers, anxious to retain their jobs, are. The interest with which Pakistani workers have pursued workers' management stands in stark contrast to the indifference of Indian trade union officialdom. Pakistan trade unionists, who act more often as the leaders of a factory based community than as the officials of a quasi-governmental agency are often quite aggressive in pursuing workers' shopfloor concerns (Cf. Shaheed 1977).

Developing New Trade Union Strategies

Indian and Pakistani workers and labour organizers have been devising new trade union strategies for decades. Recently, emphasis has been on advancing trade union solidarity, independence, and democracy, organizing informal sector workers, and promoting workers' ownership and management plans and labour education programs. The broad contours of these emergent strategies can only be suggested here.

At the national level, India's trade union centers have made significant moves in self-transformation. Two of the largest trade union centers, the All Indian Trade Union Congress (AITUC) and the Congress Indian National Trade Union Congress (INTUC), have taken initiatives to "delink themselves from their parent political organisations." (Mani 1995) An even more significant development is the merger of the Hind Mazdoor Sabha (HMS) and AITUC, which will be complete in 1997. Perhaps the most significant development for trade union independence and democratization as well as for organization of the informal sector is the formation of the National Centre for Labour in May 1995. Made up of nearly two dozen labour unions, it is the only national trade union federation that aims to organize and represent informal sector workers. The National Centre for Labour (NCL) maintains its independence from political parties. The NCL represents nearly 600,000 workers in industries ranging from embroidery, to fish, forest, and construction work. Years of careful planning for the organization of the NCL forged a shared perception that "different sections of the working class[es]" should engage in "education and information sharing" and joint "lobbying and interaction [with]... government and its regulatory agencies." (Mani 1995: 2486) The formation of the NCL gives evidence of the resilience and responsiveness of labour to the economic and political challenges facing organized labour.

One of the members of the National Centre for Labour (NCL) is the well-known Self-Employed Women's Association (SEWA). SEWA has a membership of 220,000 women, in block printing, silk screening, garment stitching, and embroidery, 23,000 of whom work at home (Bhatt 1996). SEWA led a successful campaign for the adoption of an International Labour Organisation (ILO) Convention on Home-based Workers. Discussions in the ILO raised understanding about the limited protections to this large and growing segment of the informal sector. The implementation of the ILO Home Work Convention will promote the equal treatment and legal protection of home-based informal sector workers.

Another front within Indian trade unionism has pressed for "the creation of worker cooperatives [as] an alternative form of ownership and control over production" (Thankappan 1996). The movement of plant based trade unionists pursuing workers' management has grown in response to the widespread problem of mismanagement in the private sector. Outstanding credit tied up in sick industries in the private sector was estimated at over US$3 billion in 1989 and was expanding at a rate of over 18% per annum (Goswami 1993: 3). The majority of these industries are unprofitable due to mismanagement (Tiwari 1984).

Kamani Tubes Ltd. in Bombay, manufacturer of metal tubes, is the most celebrated workers' management experiment in India. Company performance at privately owned and operated Kamani Tubes began to decline in 1975. "Internecine feuds and litigation among Kamani family members" and "imprudent and undesirable management practices" made the enterprise unprofitable (GoI 1991). The Industrial Development Bank of India and a national bank devised refinancing and rehabilitation schemes, giving the company fresh capital. Still, Kamani management was unsatisfactory. In 1987, the Kamani Employees Union won a Supreme Court judgment referring the company to the Board for Industrial and Financial Reconstruction. The union devised a plan to cut the labour force and finance operations through reductions in salaries and use of provident funds. The worker managed company became profitable within two years of operation.

The success of the workers' management experiment at Kamani Tubes led to the formation of the Centre for Workers' Management and to five other successful workers' management operations. Each of these worker-managed manufacturing industries is the result of the workers' struggle to keep a mismanaged private sector enterprise viable. It is curious, given the prevalence of cooperatives in Indian agriculture, that workers' cooperatives in India are rare and given little but rhetorical support by the government and by official trade union centers. The CWM aims to reverse this tendency by giving management education to labour organizers, developing techniques to monitor the financial performance of enterprises, and facilitating the development and adoption of rehabilitation schemes for sick companies. 

Advocates for workers' management solutions to sickness in Indian industry continue a long tradition of exposing private and public sector mismanagement. Together with other labour organizers, they argue that as privatization is a method for improving efficiency, not an end in itself, then increased managerial autonomy and new forms of ownership are required. Major business groups are managed privately, without day to day interference by government agencies, despite the fact the government often owns the majority of the assets in their industries. In the public sector, however, the government often fails to appoint directors for long periods and important production and marketing decisions are not made with due consideration to long-term viability. Workers have demonstrated unique perspectives on management and incentives for industrial competitiveness. By force of the new economic policies and accompanying industrial restructuring, Indian trade unions have stepped up their surveillance of company corruption and mismanagement, in the private sector and in the public sector. Trade unions have raised concern in national economic policy debates that the public sector is being treated by some as the private domain of select civil servants, politicians, and businesspeople. The workers' management movement is to a large degree an expression of workers' commitment to responsible industrial development.

The experience of one trade unionist, the President of one of two representative unions at a giant Indian public sector unit, suggests the journey that unionists have had to undertaken. Bharat Electronics Limited was disinvested of more than 20% in 1991 in India's first round of public sector disinvestments and another 5% in 1995. Comrade Matthew, the President of the All India Trade Union Congress (AITUC), was elected over the official candidate of the Communist Party of India, to which AITUC is affiliated. Workers in Karnataka and especially in the Bangalore public sector, where Bharat Electronics is located, have a reputation for preferring the representation of politically unaffiliated leaders over affiliated leaders. Under Comrade Matthew's leadership, the union won a Karnataka High Court case against further privatization on the grounds that the management had not formulated a business plan that demonstrated the need for or the advantage of further disinvestment. The court held that until the central government could show such a plan, it could not initiate further disinvestment. 

Employees have also proposed a share-holding plan, under consideration by the high court. This gives evidence of the commitment of the workers to industrial restructuring and market competitiveness. Comrade Matthew argues that the enterprise needs to try "new forms of ownership and management" and to be "receptive to collaboration between publics sector units and multinational corporations" (Matthew 1996). The willingness of the labour leader and of the workers whom he represents to accommodate to the demands of the market reflects the commitment of Indian industrial workers generally to do what is necessary to save their enterprises and their jobs.

One of the challenges these unions face is to demonstrate to government that they have not only the organizational strength and determination to organize strikes and political protests but that they also have the ability to discuss and negotiate credible industrial rehabilitation programs. Indian trade union centers are meeting that challenge in a series of special tripartite industrial rehabilitation commissions. Indian trade union centers are negotiating with government the rehabilitation of the cotton textile, jute, chemical, engineering, electricity generation and distribution, and road transport industries.

Pakistani trade unionists have also been active in developing new union strategies. New varieties of union strategies are emerging in Pakistan, involving inter-federation cooperation, trade union-community alliances, support for workers' ownership and management schemes, and a renewed emphasis on workers' education. 

At the national level, the most significant recent development in Pakistan trade unionism was the March 1995 formation of the Pakistan Workers' Confederation. The Pakistan Workers' Confederation (PWC) has coordinated protests across the country against wage compression, rising prices, unemployment, the contract labour system, industrial closures, and under-utilization of capacity. The merger is explained by the six participating federations as necessitated by the deep economic, political, and social crisis in which feudalism, corruption, nepotism, and lawlessness have reached historic heights. One of the PWC's objectives is to gain greater influence over economic policy decisions.

The central concern of one of the federations participating in the PWC, the All Pakistan Federation of Trade Unions, is the privatization of the power generation and distribution system (WAPDA). Union leaders claim that the nation will be "plunged into darkness" if WAPDA is privatized as thousands of villages are not profit-making sites of operation (Dawn 1995). The Hydro Electric Central Labour Union has met with Ministers of the National and Provincial Assemblies to give publicity to the estimate made by a former Finance Minister that privatization of the power sector would add US$330 million to the burden of power consumers annually. The electricity workers union has also fought the privatization of Pakistan's power sector in the courts and protested the privatization plan in the streets (Ahmed 1995).

One of the most significant decisions of the PWC is an agreement not to compete between each other in CBA elections. Pakistani federations calculate that to strengthen themselves they must overcome the divisive logic of factory level competition. Inter-union solidarity drawn from the plant level promises to have considerable national influence.

New Pakistan trade union strategies have also involved greater emphasis on workers' education. The Pakistan Institute of Labour Education and Research (PILER) has been organizing workers education programs since the early 1980s. Trade unionists from all major Pakistani federations participate in the programs, which are "aimed at enhancing the social and political awareness" of shop-floor level trade union leaders (MLF 1992). Plant-level trade union leaders learn about human rights, labour law, public interest litigation, the environment, economics, and patriarchy (PILER 1989).

Another strength of Pakistani unionism, derived in part from its independence from political parties, is cooperation with non-governmental organizations involved in environmental protection. When the private company Dansk Sojakagefabrik (DS) sold an outlawed chlor-alkali plant to the Pakistani company Ravi Alkalis for installation in Karachi, Pakistani non-governmental organizations (NGOs), including the PWC, successfully blocked the deal. Together with Greenpeace International, the Pakistani NGOs and trade unions in the Confederation threatened to prevent the unloading at the Karachi Port. The plant which uses mercury cell technology, the most polluting of the three available chlor-alkali production technologies, had been banned from operating in Denmark on account of workers' health problems (Sarwar 1994).

Trade Union Democracy

The response of trade unionists and labour activists to international economic integration and to more informal labour practices is tempered differently by the political regimes under which labour institutions form. But Indian and Pakistani labour institutions are not replicas of the political regimes that structured them. The Pakistani military imposed regular factory-level, secret-ballot elections upon labour's organizations while Indian democracy promoted top-down, political party control of labour's organizations. It may appear somewhat ironic that an authoritarian regime would institute workplace elections, whereas a democratic regime would promote statism and bureaucracy. The success of the privatization measures in Pakistan, however, suggest that regular elections are an important mechanism for the depoliticization of the trade union movement. The absence of a system by which workers may select their trade union representatives provides Indian political parties with opportunities to mobilize labourers and politicize industrial restructuring. 

This is not always in the interest of workers. Pakistan's industrial restructuring and privatization program, which has gone further than India's, has involved less labour unrest and better compensation packages in part because employers are able to negotiate with legally recognized, workplace elected trade unions officials (Cf. Candland 1996). In India, disagreements between the trade unions and the government have prevented the adoption of an explicit mechanism for trade union recognition. Just as there is no mechanism for the recognition of national trade union in India, there is no legal mechanism for trade union recognition at the factory-level, other than its affiliation with a political party. As early as 1968, the National Commission of Labour, recommended that minimum national membership levels be achieved to acquire consultative status. The recommendation was largely ignored until the early 1980s (Datar 1983: 6-7). Trade union recognition in all but three states is based upon a check-off system. Trade unions claim members, labour officials verify these claims, and workers are presented with the results. The absence of elections or other explicit criteria for trade union recognition arguably invites political party manipulation into Indian unionism. A system for the recognition of trade unions by employers was devised by Parliament in 1946. It is widely suspected that this system is not used because it would expose the unrepresentative character of India’s national trade union centers, as when a government verification showed grossly inflated membership claims in 1980 (Datar 1983: 11) and again in 1995. Recently, the major trade union centers, with the significant exception of INTUC, have expressed supported for secret ballot elections, even though such a mechanism for trade union recognition is likely to reduce their membership and their standing in state and central government consultations.

Political unionism has not outlived its usefulness. In South Asia, the social demand for labour to act politically is at a historical high. Trade union response to the limitations of conventional political unionism is not to become apolitical. Given the ability of informal means of production to disorganize workers, the political challenges to organized labour are higher than ever. Methods for effective collective action in India and Pakistan involve more democratic means of decision-making, increased efforts trade union and federation cooperation and mergers, and programs to develop the technical economic and accounting skills with which to better negotiate rehabilitation packages with management, government agencies, and financial institutions. As organized labour in both countries now seeks to transform itself, it is developing a new social element to the political work as well as a new political orientation.

This comparative analysis of Indian and Pakistan trade union development and response to new economic realities demonstrates that the structure of labour institutions in late industrializing economies, although neglected by economic development theory, is a critical determinant of macroeconomic performance. Some of the new models in economics involve the division of labour, human resource investment, education and training, and learning by doing (Boyer 1995: 27). Still, much conventional economic theory, including contemporary `classical' macroeconomic theory, assume the existence of perfect (i.e., institution-less) labour markets, a condition nowhere in evidence and impossible to imagine without the complete commodification of labour. Worldwide, societies may be at the dawn of a new industrial revolution, a new phase of the commodification of labour. But labour, as Polanyi (1944) recognized, can not be completely commodified. Labour will always resist, always struggle to preserve itself against the merely economic. How labour resists will differ according to the institutional legacy of past political regimes, but trade unionists in both India and Pakistan are making efforts toward greater democratization and decentralization as other labour activists are working to achieve greater organizational capacity and more effective political influence.


Ahmed, Khurshid, [General Secretary, Pakistan WAPDA Hydroelectric Central Labour Unions], interview, Lahore, 8 December 1995.

Ahmed, Muneer, "The November Mass Movement in Pakistan," Political Sociology: Perspectives on Pakistan, Lahore: Punjab Adbi Markaz, 1978, (1974), 1-56.

All Pakistan State Enterprises Workers' Action Committee, "Accord signed with the Govt," mimeograph, 1991. (summarized in GoP, Economic Survey 1991-92, Islamabad, 1992.)

Anderson, Perry, "The Limits and Possibilities of Trade Union Action," in Robin Blackburn and Alexander Cockburn, eds., The Incompatibles, London: Penguin, 1967.

Arrighi, Giovanni, and John S. Saul, "Socialism and Economic Development in Tropical Africa," Journal of Modern African Studies, 6: 141-169, 1968.

Bakshi, Rajni, "The Legacy of a Marathon Struggle," The Hindu, 20 September, 1992.

Balanandan, E., "Presidential Address to the Working Committee Meeting (annual) of the All India Trade Union Congress," 2 November 1995 (Bhilai), in The Working Class, 25: 4, (December 1995), New Delhi: AITUC, 5-6.

Bhatt, Ela, "SEWA is Heading Towards Full Employment at the Household Level," interview with Sindhu Menon, in Labour File, 2: 4, (April 1996), 19-22.

Boyer, Robert, "Do labour institutions matter for economic development? A "régulation" approach for the OECD and Latin American with an extension to Asia," in Gerry Rodgers, ed., Workers, Institutions and Economic Growth in Asia, Geneva: International Institute for Labour Studies, 1995. 

Candland, Christopher, "The Economic Legacies of Political Regimes: Labour Institutions in India and Pakistan," unpublished Ph.D. dissertation, Department of Political Science, Columbia University, 1996.

Candland, Christopher, "Trade Union Development and Industrial Restructuring in India and Pakistan," Bulletin of Concerned Asian Scholars, 27: 4, (October - December 1995), 63-78.

Chandra Das, Prafulla, Trade Union and Politics in India: A Study of Orissa, New Delhi: Discovery Publishing House, 1990.

Chatterji, Rakhahari, Unions, Politics and The State: A Study of Indian Labour Practices, New Delhi: South Asian Publishers, 1980.

Chowdhury, Supriya Roy, "Industrial Restructuring, Unions and the State: Textile Mill Workers in Ahmedabad," Economic and Political Weekly, 24 February 1996, L-7-L-13.

Collier, Ruth Berins, and David Collier, Shaping the Political Arena: Critical Junctures, the Labour Movement and Regime Dynamics in Latin America, Princeton: Princeton University Press, 1991.

Datar, B. N., "Trade Union Recognition," Bombay: Lala Lajpat Rai College of Commerce and Economics, 1983.

Dawn, "Confederation of six workers' groups flay WAPDA privatisation," Dawn, Karachi, (16 April 1995).

Economic Review, "Privatization - Need for Checks and Balances," Economic Review, (February 1992).

Geertz, Clifford, Agricultural Involution: The Processes of Ecological Change in Indonesia, Berkeley: University of California Press, 1963.

Goswami, Omkar, et al., "Report of the Committee on Industrial Sickness and Corporate Restructuring," submitted to the Union Minister of Finance, Government of India, July 1993.

Gourevitch, Peter, Politics in Hard Times, Comparative Responses to International Economic Crises, Ithaca: Cornell University Press, 1986.

Government of India, Ministry of Finance, Board for Industrial and Financial Reconstruction, Industrial Sickness - Case Studies: Metallurgical, volume 1, part 4, (July 1991), mimeograph.

Government of Pakistan, Pakistan Essential Services (Maintenance) Act, 1952, Sec. 3, Para. 2. 

International Labour Office, "India: Tripartite Cooperation for Structural Adjustment," Social and Labour Bulletin, (June, 1992), 143-145.

Khan, A. R., [Chief Economist, Pakistan Planning Commission], interview, Islamabad, 29 November 1995.

Khan, Noor, [Air Marshal (retired) and former Deputy Martial Law Administrator (1968- 69)], interview, Karachi, 3 April 1995.

Lenin, V. I., "What Is to be Done? Burning Questions of Our Movement," The Lenin Anthology, ed., Robert Tucker, New York: W. W. Norton, 1975.

Lewis, W. Arthur, "Economic Development with Unlimited Supplies of Labour," The Manchester School of Economic and Social Studies, 22: 2, (May 1954), 139-191.

Maddison, Angus, Class Structure and Economic Growth: India and Pakistan since the Moghuls, New York: W. W. Norton, 1971, 85.

Mani, Mohan, "New Attempt at Workers' Resistance," Economic and Political Weekly, 7 October 1995.

Matthew, Babu, [President, Bharat Electronics Employees Union], interview, Bangalore, 24 June 1996.

Mathur, Ajeet N., "The Experience of Consultation during Structural Adjustment in India (1990-92)," 132: 3, International Labour Review, (1993), 331-345.

Muzumdar, Kamal, [former INTUC official], interview, New Delhi, 28 November 1991.

Muttahida Labour Federation, "An Introduction to the Muttaheeda Labour Federation," pamphlet, May 1992.

Nagarik Mancha, Against the Wall: West Bengal Labour Scenario, Calcutta: Spokesman, 1991.

Naik, Hariben, [President, Rashtriya Mills Mazdoor Sangh], interview, Bombay, 20 April 1992.

Omvedt, Gail, Reinventing Revolution: New Social Movements and the Socialist Tradition in India, Armonk, New York: M. E. Sharpe, 1993.

Pakistan Institute for Labour Education and Research, "Trade Union Leadership Development Course," mimeograph, February 1989.

Polanyi, Karl, The Great Transformation, New York: Farrar & Rinehart, 1944.

Rudolph, Lloyd, and Suzanne Hoeber Rudolph, In Pursuit of Lakshmi: The Political Economy of the Indian State, Chicago: University of Chicago Press, 1987. 

Samant, Datta, [President, Kamgar Aghadi (Workers Party)], interview, Bombay, 3 March 1993.

Sarwar, Beena, "Pakistan: Greens to Blockade Import of Danish Ship," Interpress Services, 15 November 1994.

Setalvad, Teesta, "Workers Mean Business," Business India , 6-19 July, 1992, 99-100.

Shaheed, Zafar, "The Organisation and Leadership of Industrial Labour in Pakistan (Karachi)," unpublished Ph.D. dissertation, Department of Politics, University of Leeds, 1977.

Sharma, Mukul, "Informal - Sector Employment," Labour File, 1: 1, (October 1995), 19-21.

Shrouti, Arvind, "New Economic Policy, Changing Management Strategies - Impact on Workers and Trade Unions," New Delhi: Friedrich Ebert Stiftung, 1994.

Thankappan, D., [Director, Centre for Workers' Management], letter to P. Chidambaram [Minister of Finance], 15 June 1996.

The Statesman, "Cabinet decides to privatize IISCO," The Statesman, 27 November 1993.

Tiwari, T., et al, "Report of the Committee to Examine the Legal and Other Difficulties Faced by Banks and Financial Institutions in Rehabilitation of Sick Industrial Undertakings and Suggest Remedial Measures Including Changes in the Law," Bombay: Reserve Bank of India, 1984. 

van Wersch, Hubert, The Bombay Textile Strike 1982-83, Bombay: Oxford University Press, 1992

World Bank, Pakistan: Country Economic Memorandum FY93: Progress Under the Adjustment Program, Washington, DC: World Bank, 23 March 1993, 49.

Yaqoob, Mohammad, [Chairman All Pakistan State Employees Workers Action Committee], interview, New Delhi, 29 March 1992.

Back to the top